Market insider trading alarms

U.S. regulators and lawmakers are scrutinizing a string of trades placed just before President Donald Trump’s Iran announcements moved oil and stock markets. (reuters.com) The Commodity Futures Trading Commission is examining oil futures trades made before at least two Trump policy shifts, on March 23 and April 7, according to Reuters and CNBC. The probe is focused on trading on CME Group and Intercontinental Exchange venues. (reuters.com) (cnbc.com) On March 23, a burst of trading hit S&P 500 e-mini futures and oil futures about 15 minutes before Trump posted that the U.S. and Iran had held talks and that he was postponing planned strikes on Iranian infrastructure. After the post, S&P 500 futures jumped more than 2.5% and West Texas Intermediate crude fell nearly 6%. (cnbc.com) CBS News reported that between 6:49 a.m. and 6:50 a.m. Eastern on March 23, about 6,200 Brent and West Texas Intermediate contracts changed hands, with a notional value of about $580 million. That was far above the roughly 700 contracts traded in the same minute over the previous five trading days. (cbsnews.com) On April 7, traders placed an approximately $950 million bet on falling oil prices before Trump announced a two-week ceasefire with Iran, according to Reuters and Senate Democrats. Senators Elizabeth Warren and Sheldon Whitehouse said the announcement sent oil prices down about 15%. (reuters.com) (banking.senate.gov) The BBC said its review found a broader pattern, with repeated spikes in trading volume minutes or hours before Trump’s market-moving statements on Iran. Other outlets summarizing the BBC’s reporting said the pattern appeared across oil, equities and prediction markets. (livemint.com) (moneycontrol.com) Insider trading usually means trading on material nonpublic information, or market-moving facts that ordinary investors do not yet have. In this case, the central question is whether anyone learned about war or diplomacy decisions before Trump announced them and traded first. (cbsnews.com) (cnbc.com) Investigators have asked exchanges for Tag 50 identifiers, data that can help trace which firms or traders placed the orders. CME said it “vigorously” surveils its markets and works with the CFTC, while ICE declined to comment. (cnbc.com) (reuters.com) Rep. Sam Liccardo, a California Democrat on the House Financial Services Committee, wrote on April 17 to Securities and Exchange Commission Chair Paul Atkins and CFTC Chair Michael Selig asking whether regulators were examining the trades. He said the timing “strongly suggest[s]” trading on advance knowledge of presidential action. (cnbc.com) The White House has denied misuse of insider information, even as Reuters reported it warned staff against using their positions to bet in futures markets during the Iran war. The next test is whether regulators can identify who traded and whether they can prove anyone had confidential government information before the announcements. (reuters.com) (ndtv.com)